Magna Sees Ad Growth Slowing in 2012

Online, national TV seen gaining share
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Media agency MagnaGlobal on Tuesday said slower economic growth will cut media spending, but that online and national will gain share.

Magna said that its 2011 forecast of 1.6% advertising revenue growth o $173.5 billion remains unchanged, but that it is lowering its 2012 forecast including Olympic and election spending from 4.8% to 2.9%.

"A slowdown in real personal consumption expenditures, manufacturing activity, and ongoing problems in the labor and housing markets all contribute to our revised outlook," Magna's report says. "Our estimates are further impacted by continued disinflation."

Magna says that national mass media will gain share due to strength in online display advertising, online video, mobile and national cable.

"Across our three media segments, TV will be the fastest growing medium after Online in 2012, with advertising revenues increasing 7.1% compared with Online's 11.6%," Magna said in its report. The agency said television will benefit from the "quadrennial bonanza" that occurs when the presidential elections and Olympics combine to generate incremental ad spending.

" We believe the 2012 Elections and the Summer Olympics will generate incremental revenue of $3.1 billion for television: $2.5 billion in political advertising (the highest spending ever, mostly on local broadcast television) and $633 million around the London Olympics (up 5.5% compared with Beijing 2008, and primarily fuelling National Broadcast TV revenues)," Magna said.

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